HSBC sees income boost when interest rates rise

The Bank of England and the US Federal Reserve are likely to raise their benchmark interest rates in the fourth quarter this year and the first half next year respectively, moves that could help boost the income of HSBC Holdings Plc, according to the global banking giant.

HSBC reported on Monday a 12 percent drop in pretax profit to US$12.3 billion for the first half this year.

The bank, meanwhile, warned that regulators’ zeal to punish wrongdoing was putting its staff off taking reasonable business risks, Reuters reported.

“There’s a creeping concern that staff are clearly very focused on the penalties for getting things wrong and are building risk-aversion into the way they think,” Chairman Douglas Flint was quoted as saying. “We’ve got to avoid getting to the state where there’s a zero risk tolerance.”

Flint said too-harsh rules could hurt lending in areas such as commercial banking, where products can be complicated.

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